US – Devalued Borgata granted huge tax refundBy Phil - 25 October 2013
The Borgata, Atlantic City’s leading casino, has been granted a 61 per cent reduction in property tax, reflecting the decline at the casino resort.
The Tax Court of New Jersey has reduced the value of the property from $2.26bn in 2010 to $870m. Whilst the tax reduction will boost profit for the casino’s owners’ Boyd Gaming and MGM Resorts, it will reduce revenue for the city.
The two operators will be refunded around $48.8m for the 2009 and 2010 tax years, or by about 61 per cent, as well as interest.
Tax from the Borgata, previously accounted for around 16 per cent of Atlantic City’s $14.4bn tax.
Judge Patrick DeAlmeida highlighted cited the declining Atlantic City market as a major factor in his decision.
“The evidence admitted at trial establishes that, beginning in 2007, and continuing to 2009, powerful forces were combining to undermine the Atlantic City casino-hotel market in ways that threatened lasting adverse economic consequences,” he said.
City Solicitor Braun Littlefield said: “If the decision stands, its impact could effectively exempt several other casino properties from local property taxation. We maintain that this is an inequitable and grossly unfair position in which to place the taxpayers of this city.”
Tax attorney A. Paul Genato added: “This is a devastating blow to Atlantic City. We certainly don’t have $50m sitting in the bank.”